Oil and soft Canadian data in focus

There are two types of news for the Canadian dollar lately -- bad and worse. It 'worse' variety was mostly on display to start the week.

An early bounce in the loonie was wiped out by weak housing starts and a reversal in oil prices. It was compounded by the Bank of Canada's Business Outlook Survey.

The report showed hiring and spending plans were at the lowest since 2009.

"The negative effects of the oil price shock are increasingly spreading beyond the energy-producing regions and sectors," the BOC said in the survey.

CIBC said the report "highlights how the impact of the oil shock is spreading throughout other sectors of the economy, and gives us reason for caution in our outlook for Canada in the first half of this year."

USD/CAD technical analysis

The rally today broke through the July 2003 high of 1.4189 and 1.4200. The session high of 1.4219 is the highest since May 2003.

Aside from overbought indicators, there is nothing to stop USD/CAD from hitting 1.60 and a steady stream of CAD-negative news will help it get there this year.